Cash Reserves
Cash reserves are the verified liquid funds a borrower has remaining in savings after closing on a mortgage, typically measured in months of mortgage payments.
Certain loan programs require borrowers to demonstrate a specific number of months in reserve — meaning enough savings to cover two, three, or six months of mortgage payments after all closing costs and down payment are funded.
Reserves are not the same as your down payment or cash to close. They are the money left over after the transaction is complete. Retirement accounts and investment portfolios may count in some cases, but lender guidelines vary.
Why This Matters: Strong reserves can be a compensating factor that strengthens your loan approval — especially if other areas of your file are borderline. Knowing your reserve position before you apply helps you plan more strategically.
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